(Removes reference to 2012 in paragraph 5, to make clear that
entire paragraph refers to 2013 industry projections)
* Industry on pace to turn in best year since 2007
* Toyota, Honda gained market share in 2012
* Toyota's U.S. December sales up 9 pct, GM up 5 pct
* Economic uncertainty in 2013 may dampen sales
By Bernie Woodall and Ben Klayman
DETROIT, Jan 3 U.S. auto sales rose 9 percent in
December, led by foreign manufacturers, capping off the best
year for the industry since before the recession.
The year's sales were driven by a slowly recovering economy,
more available credit and the need for consumers and businesses
to replace aging cars and trucks.
General Motors Co posted December U.S. sales growth
of 5 percent compared with the year-earlier month, Ford Motor Co
increased sales 2 percent and Chrysler Group LLC's sales
rose 10 percent.
Wall Street cheered the results, sending GM and Ford stock
to their highest levels since July 2011.
Research and consulting firm Polk said it expects U.S. auto
sales to hit 15.3 million vehicles in 2013, an increase of
nearly 7 percent. GM and Ford both predicted industry sales of
more than 15 million vehicles, but Toyota Motor Corp
offered a more modest forecast of 14.7 million vehicles.
In the decade prior to 2008 when the recession slowed the
industry, U.S. auto sales averaged nearly 17 million vehicles a
While last month's auto sales showed little impact of
jitters caused by the so-called fiscal cliff - which proved
largely averted - automakers expressed worry over the fog of
remaining uncertainty emanating from Washington.
The impact of a payroll tax increase that took effect at the
start of the year and the upcoming congressional debate over
raising the U.S. debt ceiling may keep some consumers out of the
market in 2013, several automakers said.
"It would have been nice if all the open questions had been
resolved in the 'fiscal cliff' discussion over the holiday, but
clearly they weren't, and that does extend this period of
uncertainty from a consumer point of view," Jonathan Browning,
head of Volkswagen AG's American unit, told
reporters on a conference call.
A 2 percentage-point payroll tax increase will take about
$1,000 from the average household budget, said Ford economist
"It is something that we're looking at very carefully, as it
will crimp the consumer spending scene somewhat in the months
ahead," said Hughes-Cromwick.
Jesse Toprak, analyst with TrueCar.com, said the hit to
households would be about the same amount as a down payment on a
"The cheap financing and improved income will make up for
that, but that's something we're going to have a keep an eye
on," he said.
Hughes-Cromwick said the tax increases for the wealthiest
Americans will not greatly affect auto sales, because they tend
to purchase new vehicles even if taxes change.
Tom Libby, an analyst at Polk, said continued low interest
rates along with an improved housing sector and new product
offerings from major automakers will make 2013 a bullish year
for the industry.
Detroit's automakers showed December U.S. sales gains of 5
percent, slightly better than analysts' expectations, but not
enough to stave off market-share gains by Toyota and Honda Motor
The two largest Japanese automakers in the U.S. market
rebounded from poor showings in 2011 when their inventory was
constrained after the Japan earthquake and tsunami.
Toyota reported a 9 percent U.S. sales increase for
December, which met analysts' expectations. Honda's December
sales rose 26 percent but fell short of analysts' expectations.
Honda sales are up 24 percent on the year.
Toyota's 2012 U.S. sales rose about 27 percent, compared
with gains of 3.7 percent for GM, 4.7 percent for Ford, and 21
percent for Chrysler.
Industrywide for the year, U.S. auto sales for 2012 rose
13.5 percent to nearly 14.5 million new vehicles, the best
performance since 2007, according to Reuters calculations.
GM's market share is now at its lowest level since at least
1960, and probably at a low not seen since 1930, according to
industry journal Ward's Auto.
GM and Ford lost market share in 2012, dented by competition
from Toyota and Honda which recovered from 2011
GM entered December with a 17.9 percent share of the U.S.
market. While it is still the top automaker as measured in U.S.
sales, its market share has fallen from 19.6 percent for 2011
and 23.5 percent in 2007.
"We're always concerned about market share - always," said
Mark Reuss, GM chief in North America. "But we're not going to
give it away like we did in the past and burn the residuals and
the brand values in anticipation of the biggest product
portfolio launch that we've had in history."
Reuss referred to the years before GM's 2009 bankruptcy and
taxpayer bailout, when vehicle production outpaced demand and it
layered on incentives to lower prices for consumers.
The F-Series pickup truck from Ford, the top-selling vehicle
in North America for more than three decades, had its best sales
month in December since August 2007.
The F-Series remained the best-selling vehicle in the United
States, with annual sales of 645,316, followed again by the
full-size Chevrolet Silverado pickup, at 418,312.
Most luxury brands had a good year. BMW for the
second straight year edged German rival Mercedes-Benz for the
U.S. sales crown, followed by Toyota's Lexus and Honda's Acura.
The two U.S. luxury brands both saw sales fall in 2012, with
Cadillac down 1.7 percent and Lincoln off 4.1 percent.
Japanese models swept the next four places, with Toyota
Camry leading Honda Accord, Honda Civic and Nissan Altima.
Chrysler's Ram pickup placed seventh, followed by Toyota
Corolla, Ford Escape and Ford Focus.
Both GM and Ford went into the recession that began in late
2007 - and into 2008 when gasoline prices spiked - overladen
with low-mileage big pickup trucks and SUVs.
Chrysler easily beat analysts' expectations and had its 33rd
consecutive month of year-on-year sales gains. Its annual sales
rose 21 percent. Its market share at the end of November was
11.1 percent up from 10.6 percent in 2011. Chrysler is
majority-owned by Italian automaker Fiat SpA.
Sales for South Korea's Hyundai Motor Corp and
Kia Motors Co rose 5 percent. Hyundai, the larger of
the sister companies, reported full-year U.S. sales of 703,007
vehicles, a company record.
Volkswagen reported a monthly increase of 31.5 percent for
its namesake brand and luxury brands Audi and Porsche and a 30
percent gain for the full year.
December sales fell 12 percent for Lincoln, Ford's luxury
Aided heavily by consumer incentives that reduce the price
of the vehicles, GM in December dramatically trimmed its
inventory of full-size pickup trucks to 80 days of supply from
139 days at the end of November. Most automakers like to have
about 80 days of supply of these pickup trucks.
For the overall industry, the pace of annual sales increases
has been in the double digits since the market bottomed in 2009,
when it hit the worst annual sales rate since World War Two,
adjusting for population.
Ford shares were up 2 percent at $13.46 and GM shares were
up 2.2 percent at $29.77 late on Thursday.
(Additional reporting by Deepa Seetharaman and Paul Lienert in
Detroit; editing by Maureen Bavdek and Matthew Lewis)